Monetary Policy, Asset Prices and Consumption in China

33 Pages Posted: 7 Nov 2010

Multiple version iconThere are 3 versions of this paper

Date Written: October 28, 2010


This paper studies the wealth channel in China. Using the structural vector autoregression method, we find that a loosening of China’s monetary policy indeed leads to higher asset prices, which in turn are linked to household consumption. However, the importance of the wealth channel as a part of the monetary policy transmission mechanism in China is still limited.

Keywords: China, monetary policy, asset prices

JEL Classification: E52, P24

Suggested Citation

Koivu, Tuuli, Monetary Policy, Asset Prices and Consumption in China (October 28, 2010). BOFIT Discussion Paper No. 18/2010, Available at SSRN: or

Tuuli Koivu (Contact Author)

Bank of Finland ( email )

P.O. Box 160
Helsinki 00101

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